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Host Hotels (HST) to Post Q3 Earnings: What's in the Cards?
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Host Hotels & Resorts, Inc. (HST - Free Report) is scheduled to report third-quarter 2017 results on Nov 1, after the market closes.
Last quarter, this Bethesda, MD-based lodging real estate investment trust (REIT) delivered a better-than-expected performance in terms of funds from operations (FFO) per share, generating a positive surprise of 6.5%. Results indicate growth in comparable hotel Revenue per available room (RevPAR) and improvement in margin.
Moreover, Host Hotels has a decent surprise history. The company posted positive surprises in each of the trailing four quarters, with an average beat of 7.5%. This is depicted in the graph below:
Host Hotels & Resorts, Inc. Price and EPS Surprise
Note: The EPS numbers presented in the above chart represent funds from operations (“FFO”) per share.
Currently, the Zacks Consensus Estimate for third-quarter FFO per share is pegged at 33 cents.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Host Hotels boasts a portfolio of upscale hotels across lucrative markets in the United States. Also, the company is making concerted efforts to enhance its portfolio quality through strategic capital-recycling program. The company is making opportunistic acquisitions, as well as making strategic redevelopments to fortify its position in global vibrant markets. In addition, Host Hotels has a decent balance sheet and ample liquidity.
However, the company anticipates third-quarter results to be weaker than the first half. This is because of the impact of holiday shift — the Jewish holidays moving back from October to September, and tough comps related to the Olympics in Brazil in the third quarter last year. As such, the company expects 21% of its total EBITDA for 2017 to be generated in the quarter under review. Further, supply growth in the company’s key markets remains a concern.
Amid these, the Zacks Consensus Estimate for third-quarter revenues is pegged at $1.27 billion, marking an estimated decline of 1.7% year over year. The Zacks Consensus Estimate for Room Revenues is $883 million, denoting a decrease from $940 million reported in the prior quarter, while the Food and Beverage revenues estimate is pegged at $332 million which is also below $416 million reported in the previous quarter.
Also, in a month’s time, the Zacks Consensus Estimate of FFO per share for the third quarter moved down 2.9% to 33 cents, underlining analysts’ bearish sentiments.
Nevertheless, Host Hotels’ shares have rallied 7.3% over the past six months, outperforming the industry’s gain of 0.6%.
Earnings Whispers
Our proven model does not conclusively show that Host Hotels will likely beat estimates this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. However, that is not the case here as you will see below.
Zacks ESP: The Earnings ESP, which represents the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at -1.09%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Host Hotels currently has a Zacks Rank #4 (Sell).
This combination leaves our prediction inconclusive.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Sabra Health Care REIT, Inc. (SBRA - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +1.56% and a Zacks Rank of 3.
Boston Properties, Inc. (BXP - Free Report) , set to release quarterly numbers on Nov 1, has an Earnings ESP of +0.55% and a Zacks Rank of 3.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Host Hotels (HST) to Post Q3 Earnings: What's in the Cards?
Host Hotels & Resorts, Inc. (HST - Free Report) is scheduled to report third-quarter 2017 results on Nov 1, after the market closes.
Last quarter, this Bethesda, MD-based lodging real estate investment trust (REIT) delivered a better-than-expected performance in terms of funds from operations (FFO) per share, generating a positive surprise of 6.5%. Results indicate growth in comparable hotel Revenue per available room (RevPAR) and improvement in margin.
Moreover, Host Hotels has a decent surprise history. The company posted positive surprises in each of the trailing four quarters, with an average beat of 7.5%. This is depicted in the graph below:
Host Hotels & Resorts, Inc. Price and EPS Surprise
Host Hotels & Resorts, Inc. Price and EPS Surprise | Host Hotels & Resorts, Inc. Quote
Note: The EPS numbers presented in the above chart represent funds from operations (“FFO”) per share.
Currently, the Zacks Consensus Estimate for third-quarter FFO per share is pegged at 33 cents.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Host Hotels boasts a portfolio of upscale hotels across lucrative markets in the United States. Also, the company is making concerted efforts to enhance its portfolio quality through strategic capital-recycling program. The company is making opportunistic acquisitions, as well as making strategic redevelopments to fortify its position in global vibrant markets. In addition, Host Hotels has a decent balance sheet and ample liquidity.
However, the company anticipates third-quarter results to be weaker than the first half. This is because of the impact of holiday shift — the Jewish holidays moving back from October to September, and tough comps related to the Olympics in Brazil in the third quarter last year. As such, the company expects 21% of its total EBITDA for 2017 to be generated in the quarter under review. Further, supply growth in the company’s key markets remains a concern.
Amid these, the Zacks Consensus Estimate for third-quarter revenues is pegged at $1.27 billion, marking an estimated decline of 1.7% year over year. The Zacks Consensus Estimate for Room Revenues is $883 million, denoting a decrease from $940 million reported in the prior quarter, while the Food and Beverage revenues estimate is pegged at $332 million which is also below $416 million reported in the previous quarter.
Also, in a month’s time, the Zacks Consensus Estimate of FFO per share for the third quarter moved down 2.9% to 33 cents, underlining analysts’ bearish sentiments.
Nevertheless, Host Hotels’ shares have rallied 7.3% over the past six months, outperforming the industry’s gain of 0.6%.
Earnings Whispers
Our proven model does not conclusively show that Host Hotels will likely beat estimates this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. However, that is not the case here as you will see below.
Zacks ESP: The Earnings ESP, which represents the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at -1.09%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Host Hotels currently has a Zacks Rank #4 (Sell).
This combination leaves our prediction inconclusive.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Regency Centers Corporation (REG - Free Report) , slated to release third-quarter results on Nov 1, has an Earnings ESP of +2.96% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sabra Health Care REIT, Inc. (SBRA - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +1.56% and a Zacks Rank of 3.
Boston Properties, Inc. (BXP - Free Report) , set to release quarterly numbers on Nov 1, has an Earnings ESP of +0.55% and a Zacks Rank of 3.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>